India is likely to continue export incentives worth Rs 40,000 crore till next year as the government looks to cushion the impact of Covid-19 on the country’s outward shipments. The commerce and industry ministry is considering a plan to extend the Merchandise Exports from India Scheme (MEIS) till March 31, 2021. The proposal was mentioned in a letter to development commissioners of special economic zones from the Department of Commerce. ET has reviewed the letter. India’s exports shrank almost 35% to $21.41 billion in March from a year earlier. They declined 4.8% to $314.31 billion in FY20 from $330.08 billion in FY19. “MEIS extension will bring predictability to exports pricing and on the policy front. Exporters’ confidence will get a boost,” said Ajay Sahai, director general of the Federation of Indian Export Organisations. The scheme was extended to December 31, 2020, the government said last month when it announced the extension of the extant ..
Under MEIS, the government provides duty benefits, depending on the product and the destination country. Rewards under the scheme are payable as a percentage of the realised free-on-board value (of 2%, 3% and 5%) and the MEIS duty credit scrips can be transferred or used to pay duties including basic customs duty.
Exporters are estimated to have received benefits worth Rs 35,000-40,000 crore under MEIS in FY19. “Exporters would need financial support from the government to stand on their feet again… The government has to decide whether extending or increasing the MEIS rates is an option they would like to exercise,” said Pratik Jain, national leader, indirect tax, PwC. He said one specific recommendation of the industry was restora-tion of the 2% additional benefit of MEIS, which was withdrawn from Januar ..
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